{"ok":true,"canonical_url":"https://dealroom.so/glossary/valuation-gap","api_url":"https://dealroom.so/api/public/glossary/valuation-gap","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"valuation-gap","term":"Valuation Gap","group":"Reading the business","definition":"This is the difference between what a buyer is willing to pay and what a seller expects for a business. It commonly arises when their perceptions of value do not align.","what_it_means":"A valuation gap frequently occurs when the seller's asking price, often influenced by subjective factors or future hopes, exceeds the buyer's objective assessment derived from due diligence and a professional business appraisal. You can often bridge this gap by structuring the deal with tools like a seller note or an earnout, tying part of the purchase price to future performance.","url":"https://dealroom.so/glossary/valuation-gap","official_sources":[],"related":[{"slug":"business-appraisal","term":"Business Appraisal","url":"https://dealroom.so/glossary/business-appraisal"},{"slug":"business-valuation","term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"slug":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"slug":"earnout","term":"Earnout","url":"https://dealroom.so/glossary/earnout"}],"related_questions":[{"question":"When is an independent business valuation required for a partner buyout?","url":"https://dealroom.so/sba-7a/questions/when-is-an-independent-business-valuation-required-for-a-partner-buyout"},{"question":"What valuation methods are acceptable for assessing goodwill in an SBA acquisition?","url":"https://dealroom.so/sba-7a/questions/what-valuation-methods-are-acceptable-for-assessing-goodwill-in-an-sba-acquisition"},{"question":"What if the business valuation is insufficient to support the purchase price?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-valuation-is-insufficient-to-support-the-purchase-price"},{"question":"What is the importance of a professional business valuation for an acquisition?","url":"https://dealroom.so/sba-7a/questions/what-is-the-importance-of-a-professional-business-valuation-for-an-acquisition"},{"question":"Is a separate business valuation required for an SBA 7(a) acquisition loan?","url":"https://dealroom.so/sba-7a/questions/is-a-separate-business-valuation-required-for-an-sba-7-a-acquisition-loan"},{"question":"What happens if my business valuation comes in lower than the purchase price?","url":"https://dealroom.so/sba-loans/basics/what-happens-if-my-business-valuation-comes-in-lower-than-the-purchase-price"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Valuation Gap","url":"https://dealroom.so/glossary/valuation-gap","source_type":"DealRoom Data"}}